Declaration agenda on mandated negotiations, reviews ambiguous

by Chakravarthi Raghavan

Geneva, 27 Sep 2001 - The draft ministerial declaration put forward by General Council Chairman Stuart Harbinson is sparse and has little to advance on the mandated negotiations and reviews, but pushes strongly in new areas.

In terms of the future work programme, covering some of the mandated negotiations and reviews, in Agriculture a mandate that will be more than that in Art. 20 of the Agreement on Agriculture is not set. The agriculture mandate for negotiations in fact remains in the air, with the EC applying pressure on the US and through the US on the Cairns group to lower their ambitions.

There is merely a statement about the text having “to be elaborated through further consultations” and based on stipulated elements - ongoing negotiations including references to active participation of developing countries; long-term objective of reform in agriculture; direction or aims of reform in the areas of market access, domestic support and export competition; special and differential treatment; non-trade concerns; benchmarks and timeframes; and negotiating body.

On services, where the developing countries in unified and large body put forward some guidelines, the para as formulated recognizes it, but also apparently could have the effect of preventing the developing world from further developing (as they had announced) and fine-tuning the guidelines into a negotiating mandate.

The market access for non-agricultural products (the industrial tariff cut calls), which is not a mandated negotiations or review subject, but partially an additional one that surfaced in the runup to Seattle, and which has now met strong opposition in Africa (with calls for prior study to understand implications and results of tariff cuts under structural programmes etc), while having some words to satisfy some developing countries clearly will subserve the US and EU agendas.

The para says that the negotiations “shall aim”, but with the caveat of modalities to be agreed, “to reduce or as appropriate eliminate” tariffs including reduction or elimination of tariff peaks and tariff escalation as well as non-tariff barriers. There is also wording for comprehensive product coverage and no a priori exclusions, and wording that the negotiations shall take into account the special needs and interests of developing and least developed country participants, including through less than full reciprocity in reduction commitments.

An EC’s “113 document” (described as a discussion paper, but really one for its members and decisions for negotiating mandate) issued before the Seattle meeting, focused on the different approaches that could be adopted in breaking down the tariff levels of the developing world, has set out some details that suggest that in fact the idea of the favourable treatment and less than full reciprocity would merely be for tariff cut formulas achieving a maximum rate of no more than 10% for the OECD countries, 20% for developing countries and 25% for least developed , and achieving these with slightly longer time-spans for developing and least developed.

When in fact these are calculated in actual dollar terms, the  de-industrialization already achieved in Africa through the World Bank/IMF structural programs would be extended to other developing parts of the world. For the rich and elites in these countries, the import price after duty will still be such that local industries would be eliminated, as surely as they were under the liberal order enforced for example by Britain in its imperial days of the late 19th and early 20th century.

On TRIPS, there are four paragraphs calling for completion of negotiations on the establishment of a multilateral system of notification and registration of geographical indications for wines and spirits. This is an issue primarily pushed by the EC, but stalled or opposed by the US, Australia and some of the Latin Americans.

On the question of extending the scope of these negotiations on geographical indications to additional product areas (which several developing countries and some in Europe have pushed to bring in products like tea or cheese etc), the formulation provides for a ministerial agreement “to examine” in the TRIPS council the issues related to possible negotiations!

In its future work programme, the TRIPS is also asked “to give due attention” to the relationship between TRIPS agreement and the Convention on Bio-Diversity, the protection of traditional knowledge, non-violation complaints, and keeping TRIPS abreast of new technological and other developments - guided in all these by the objectives and principles of TRIPS and fully taking into account development dimensions.

This is really nothing more than exhortations, considering the record of the TRIPS Council and the secretariat’s handling of it so far.

There is a promise of sorts that a progress report on the work is to be provided to the 5th Ministerial Conference which ‘shall decide’ on further action.  Nevertheless it is just a promise.

On the Singapore issues, on Trade and Investment and Trade and Competition policy there is a seeming neutrality of Harbinson presenting two options - one for negotiations in each area and the other for continuing the study, but with a report to the 5th ministerial conference.

On Government procurement and trade facilitation, there is straightaway a mandate for some negotiations - even though at Singapore there was an implied commitment that none of these could be moved to negotiations without a consensus (in their respective study or work groups).

A symmetrically framed option for Trade and Investment and Trade and Competition could only be either for starting negotiations or ending the study programme, with a separate mandate for the continuance of all the study processes started in Singapore, with a focussed mandate (as set out as alternatives in the Mchumo text for Seattle). For example such a study process in the Mchumo text called, in investment, for both host and home country rights and obligations, as well as that of the corporations over a range of their obligations to their hosts.

Instead, the study process, read with the real operational modalities part for report and review at the 5th Ministerial Conference and in effect enabling that conference to start negotiations, is clearly an attempt to extend the frontiers of the trading system into more areas of decision-making and policy-making of countries for the furtherance of the corporate benefits of the TNCs.

And when read with the ‘single undertaking’ concept, which is of use only for forcing obligations in these new areas, it will complete the take-over of the economic space of developing countries by the corporations of the North.

The negotiating mandate for investment and competition, calls for multilateral framework of rules to secure ‘transparent, stable and predictable conditions’ for long-term cross-border investment, particularly FDI (thus implying something more is intended), reflected in a ‘balanced’ manner the interests of home and host countries (but nothing about investors, home and host responsibilities).

The core elements are to include scope and definition, transparency, non-discrimination, pre-establishment commitments based on a GATS-type approach, and settlement of disputes between governments.

There are some equally funny concepts under competition. For example, the negotiations are to deal with “hard core cartels”. Does it mean that ‘soft core’ ones are acceptable?

The paragraph on government procurement, has no options except to start negotiations on transparency in government procurement building on work done in the Working Group (which so far has not agreed on any negotiations) nor has it developed, as required by the Singapore decision, elements. The presentations and other ideas floated by the majors, including in their own internal documents to their constituencies, make clear that this is only a first step towards the objective of securing market access for their corporations in the markets of developing world. This has made many of the members have some serious second thoughts, and there has been no consensus on elements being developed.

And while the para talks of ‘shall be limited’ to transparency, it is merely a wish or promise when it talks of the negotiated accord “will not restrict” scope for countries to give preferences to domestic supplies and suppliers.

The trade facilitation is to build upon Articles V, VIII and X of GATT.

Given there is a separate mandate for visiting some WTO rules, the move seems to be nothing more than an attempt to revive failed past attempts whether customs code of the Tokyo Round or the Uruguay Round’s Customs agreement to enable foreign suppliers to get into developing country markets, and in effect prevent some vigilance at customs.

In terms of WTO rules, there is a call for negotiations aimed at clarifying and improving disciplines on the Anti-dumping and Countervailing duty measures agreement as well as that on Subsidies. While a demand that has surfaced from developing countries themselves in terms of the implementation debates, this may have a much wider scope and hence some dangerous territory.

The mandate on the DSU is very limited confined to the work already done (mostly very procedural) and does not deal with the various problems that have some to surface in the working so far, including the way the secretariats guide and influence the panel processes (in violation of all norms of judicial processes under any system of law), the free-wheeling way the appellate body is giving rulings extending the obligations and interpreting agreements.

This work of negotiating possible amendments to the DSU is to be completed by May 2003, but based on work already done thus far.

The mandate on trade and environment, singles out only some of the items that the Marrakesh declaration remitted to the Trade and Environment Committee, and in fact may result in strengthening unilateralist interpretations and actions - sought by the EU and US.

The paragraph on special and differential treatment has nothing excepting that the text to be considered (at Doha) is to take account of the report of the Committee on Development.

The paragraphs (36-37 and 38) about the organization and management is heavily loaded phrasing against the developing world. The experience of the Punta del Este Mandate, and the ways the mandates were changed through the mid-term review process, and beyond, suggest that this could easily be made into a super-weapon against the developing world.

Para 36 empowers the 5th Ministerial Conference to “take stock of progress in the negotiations, provide any necessary political guidance, and take any decisions as necessary.”

This is an open ended mandate to go far beyond and range over the entire economic area.

There is a next para, akin again to the Punta del Este declaration, that when the results of the negotiations in all areas have been established, a Special Session of the Ministerial Conference will be held to take decisions regarding the adoption and implementation of those results.

Following the example of the bad old provisional GATT, which could not in fact launch general negotiations and hence had to call ministerial conferences and for having negotiations supervised by a Trade Negotiations Committee, the declaration now similarly envisages a TNC, though acting under the authority of the General Council.

The developing countries, already hard put to deal with various WTO bodies and the General Council will now find a similar repetition of their Uruguay Round bad experience of several groups and committees meeting formally, and many informally inside and outside, and taking decisions in their absence and finding themselves bound by it.

There is another paragraph, para 38, that brings in the concept of single undertaking for the negotiations and its acceptance.

In terms of the existing WTO agreements and the various rules and other parts, this has some meaning, given the way the agreement itself has been brought in (beyond the original intention at Punta del Este) as a single undertaking to be accepted and signed on by everybody.

With the new subjects, this is a sure prescription for developing countries being more marginalised. Few developing country governments will be stable and be able to function in the face of the already existing social problems that will be heightened by the negotiations and the scope of its outcome.

In his anxiety to get a round launched during his leadership, Mr. Mike Moore the Director-General has been advocating in some fora that developing countries have the power to decide things through consensus, but that they should not exercise the power of denying consensus for the launch of negotiations, but use it to block agreements not to their advantage.

Perhaps he is laying the ground work for the launch of negotiations at Doha and its further extension at the 5th ministerial, which in effect would completely delegitimise the rules-based system. – SUNS4976

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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